During their latest episode of the VALUE: After Hours Podcast, Huber, Taylor, and Carlisle discuss Warren Buffett’s 90% Rule. Here’s an excerpt from the episode:
Q1 2023 hedge fund letters, conferences and more
Tobias: Before we came on, we were talking a little bit about Buffett’s 90%. Is it 90% confidence interval that firm’s earnings will be bigger in five years’ time? Is that how he characterizes the business will be bigger in five years’ time?
John: Yeah.
Jake: He bought exercise that they do in terms of– [crosstalk]
John: Yeah, it’s a super interesting little simple thought experiment that I thought was really neat. It’s basically like the first test is, is this company 90% likely to have greater earnings in five years or are you 90% confident that this company–? So, it’s companies that obviously within your ability to estimate that or predict that, but are you 90% confident that the company is going to be stronger in five years is how I would think about it.
Tobias: We were talking about some examples of that. Before Amazon, who did you mention before Amazon?
John: Well, we were talking about Dillard’s before we– [crosstalk]
Tobias: Was it Dillard’s? Yeah.
John: Before we turned it on. Yeah.
Tobias: Run us through that thought exercise, the Dillard’s?
You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:
Apple Podcasts- Breaker
- PodBean
- Overcast
- Youtube
- Pocket Casts
- RadioPublic
- Anchor
- Spotify
- Stitcher
- Google Podcasts
Breaker
Overcast
RadioPublic
Stitcher
For all the latest news and podcasts, join our free newsletter here.
Article by The Acquirer's Multiple.
